38364 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes July 1, 2021 (SR–CboeBZX–2021–049). On 

July 12, 2021, the Exchange withdrew that filing 

and submitted this proposal. 

4As defined in Rule 11.8(e)(1)(E), the term 

‘‘Minimum Performance Standards’’ means a set of 

standards applicable to an LMM that may be 

determined from time to time by the Exchange. 

Such standards will vary between LMM Securities 

depending on the price, liquidity, and volatility of 

the LMM Security in which the LMM is registered. 

The performance measurements will include: (A) 

Percent of time at the NBBO; (B) percent of 

executions better than the NBBO; (C) average 

displayed size; and (D) average quoted spread..[sic]. 

5The current Minimum Performance Standards 

include: (i) Registration as a market maker in good 

standing with the Exchange; (ii) time at the inside 

requirements (generally between 3% and 15% of 

Regular Trading Hours for Qualified Securities and 

between 5% to 50% for Enhanced Securities, 

depending on the average daily volume of the 

applicable LMM Security); (iii) auction 

participation requirements (generally requiring that 

the auction price is between 3% and 5% of the last 

Reference Price, as defined in Rule 11.23(a)(19), for 

a Qualified Security and 1%–3% for an Enhanced 

Security (the ‘‘Enhanced Auction Range’’); (iv) 

market-wide NBB and NBO spread and size 

requirements (generally requiring between 200 and 

750 shares at both the NBB and NBO for both 

Qualified Securities and Enhanced Securities with 

an NBBO spread between 1% and 10% for a 

Qualified Security and .25% to 4% for Enhanced 

Securities, depending on price of the security and 

underlying asset class); and (v) depth of book 

requirements (generally requiring between $25,000 

and $250,000 of displayed posted liquidity for both 

Qualified Securities and Enhanced Securities 

within 1% to 10% of both the NBB and NBO for 

Qualified Securities and 0.25% and 5% for 

Enhanced Securities, depending on price of the 

security and underlying asset class). See Securities 

Exchange Act No. 86213 (June 27, 2019) 84 FR 

31951 (July 3, 2019) (SR–CboeBZX–2019–058) (the 

‘‘Original Filing’’). The Exchange notes that as of 

February 1, 2021, the Enhanced Auction Range will 

be .50%–3%. The Original Filing provides that 

‘‘[b]efore diverging significantly from the ranges 

described above, the Exchange will submit a rule 

filing to the Commission describing such proposed 

changes.’’ The Exchange does not believe that this 

change represents a ‘‘significant divergence’’ but is 

instead noting the change in order to provide 

transparency regarding the current state of the 

Minimum Performance Standards. 

6An ‘‘Enhanced Security’’ refers to a BZX-listed 

security which meets certain enhanced qualifying 

market quality standards. 

7 ‘‘CADV’’ means consolidated average daily 

volume calculated as the average daily volume 

reported for a security by all exchanges and trade 

reporting facilities to a consolidated transaction 

reporting plan for the three calendar months 

preceding the month for which the fees apply and 

excludes volume on days when the market closes 

early and on the Russell Reconstitution Day. 

many speakers will be accommodated as 

the scheduled time allows. 

Staff from the IDA Science and 

Technology Policy Institute will 

facilitate the meeting, which will be 

recorded for use by the Task Force. 

Participation in a listening session will 

imply consent to capture participant’s 

names, voices, and likenesses. Anything 

said may be recorded and transcribed 

for use by the Task Force. Moderators 

will manage the discussion and order of 

remarks. 

Individuals unable to attend the 

listening sessions or who would like to 

provide more detailed information may 

respond to the Request for Information 

(RFI) to Improve Federal Scientific 

Integrity Policies that was published in 

the Federal Register [86 FR 34064, June 

28, 2021]. 

Dated: July 13, 2021. 

Stacy Murphy, 

Operations Manager. 

[FR Doc. 2021–15309 Filed 7–19–21; 8:45 am] 

BILLING CODE 3270–F1–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92408; File No. SR– 

CboeBZX–2021–050] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule To Eliminate the Opt-In 

Functionality Offered Under the Lead 

Market Maker Pricing 

July 14, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 12, 

2021, Cboe BZX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule. The text of 

the proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule applicable to its equities 

trading platform (‘‘BZX Equities’’) to 

eliminate the opt-in functionality 

offered under the Lead Market Maker 

(‘‘LMM’’) Pricing provided under 

footnote 14. Specifically, the Exchange 

is proposing to automatically provide an 

LMM with the greater of the LMM 

Liquidity Provision Rates or the LMM 

Add Liquidity Rebate instead of 

requiring an LMM to opt-in.3

The Exchange currently offers a 

comprehensive liquidity provision 

program to incentivize LMMs to provide 

enhanced market quality across all BZXlisted securities. Specifically, as 

provided in paragraph (A) of footnote 

14, the Exchange offers the LMM 

Liquidity Provision Rates which provide 

LMMs daily incentives that are based on 

whether the LMM meets certain 

performance based criteria (i.e., the 

applicable Minimum Performance 

Standard 4).5 The Exchange provides 

each LMM with a daily incentive based 

on how many Qualified Securities or 

Enhanced Securities 6 the LMM has and 

the average aggregate daily auction 

volume in the BZX-listed securities for 

which it is an LMM (‘‘LMM 

Securities’’). The LMM Liquidity 

Provision Rates were implemented to 

incentivize LMMs to meet the Minimum 

Performance Standards across all of 

their LMM Securities, especially for 

newly listed and other lower volume 

securities. The Exchange also currently 

offers, as provided in paragraph (B) of 

footnote 14, the LMM Add Liquidity 

Rebate which is available to LMMs in 

BZX-listed securities that have a 

consolidated average daily volume 

(‘‘CADV’’) 7 equal to or greater than 

1,000,000 (an ‘‘ALR Security’’). The 

LMM Add Liquidity Rebate allows the 

Exchange to offer LMM pricing 

comparable to other traditional LMM 

programs available on other listing 


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Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 38365 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(4) and (5). 

10As defined in Rule 11.8(e)(1)(E), the term 

‘‘Minimum Performance Standards’’ means a set of 

standards applicable to an LMM that may be 

determined from time to time by the Exchange. 

Such standards will vary between LMM Securities 

depending on the price, liquidity, and volatility of 

the LMM Security in which the LMM is registered. 

The performance measurements will include: (A) 

Percent of time at the NBBO; (B) percent of 

executions better than the NBBO; (C) average 

displayed size; and (D) average quoted spread..[sic] 

venues. Specifically, the LMM Add 

Liquidity Rebate encourages LMMs to 

meet the Minimum Performance 

Standards for Qualified Securities, but 

also provides the potential for 

additional incentives for higher volume 

securities. 

As currently constructed, an LMM in 

an ALR Security that wants to 

participate must proactively opt-in to 

the program using the Exchange’s ETP 

Portal. Further, an LMM that opts in to 

the LMM Add Liquidity Rebate program 

will receive the LMM Add Liquidity 

Rebate regardless of whether they would 

have been better off receiving the LMM 

Liquidity Provision Rates. 

Now, the Exchange proposes to 

eliminate the opt-in requirement, and 

instead proposes to automatically apply 

either the LMM Add Liquidity Rebate or 

LMM Liquidity Provision Rates for each 

ALR Security based on whichever 

would result in a greater total rebate in 

a particular calendar month. In 

determining the applicable rebate on a 

monthly basis for each ALR Security, 

the Exchange will choose the greater of: 

(i) The monthly total LMM Liquidity 

Provision Rates + (the applicable per 

share rebate that the LMM would 

receive for adding liquidity in the ALR 

Security x the number of shares for 

which the LMM added liquidity in the 

ALR Security); and (ii) $0.0039 × the 

number of shares for which the LMM 

added liquidity in the ALR Security. If 

an LMM Security does not meet the 

CADV requirement to be an ALR 

Security and become eligible to receive 

the LMM Add Liquidity Rebate, the 

LMM will continue to be subject to the 

LMM Liquidity Provision Rates by 

default. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with the objectives of Section 6 of the 

Act,8 in general, and furthers the 

objectives of Section 6(b)(4) and 

6(b)(5),9 in particular, as it is designed 

to provide for the equitable allocation of 

reasonable dues, fees and other charges 

among its Members and other persons 

using its facilities. The Exchange also 

notes that its listing business operates in 

a highly competitive market in which 

market participants, which includes 

both issuers and LMMs, can readily 

transfer their listings or opt not to 

participate, respectively, if they deem 

fee levels, liquidity provision incentive 

programs, or any other factor at a 

particular venue to be insufficient or 

excessive. The LMM pricing as a whole 

reflects a competitive pricing structure 

designed to incentivize issuers to list 

new products and transfer existing 

products to the Exchange and market 

participants to enroll and participate as 

LMMs on the Exchange, which the 

Exchange believes will enhance market 

quality in all securities listed on the 

Exchange. The proposed amendment to 

the program is designed to provide an 

automated value-add service to LMMs 

without changing the pricing structure 

of the program. 

The Exchange believes that the 

proposal is reasonable because it 

provides a value-added service to LMMs 

without changing the fees and rebates 

applicable to LMMs under footnote 14 

of the fee schedule. Specifically, the 

proposal will streamline the LMM 

pricing process by eliminating the 

requirement that an LMM opt-in to the 

LMM Add Liquidity Rebate. As 

described above, under the proposal an 

LMM would also no longer have to 

consider whether it would receive 

higher incentives under the LMM 

Liquidity Provision Rates or the LMM 

Add Liquidity Rebate on a per security 

and per month basis. Instead, the 

Exchange will automatically apply 

whichever rate is greater in that ALR 

Security for the month. Further, as 

noted above, the marketplace for listings 

is extremely competitive and there are 

several other national securities 

exchanges that offer listings. Transfers 

between listing venues occur frequently 

for numerous reasons, including market 

quality. The proposal is designed to 

enhance the existing LMM program and 

is intended to help the Exchange 

compete as a listing venue by 

streamlining the process for LMMs to 

maximize their incentives. Further, the 

proposal does not change any of the 

existing LMM fees or incentives 

provided under footnote 14. 

The Exchange believes the LMM Add 

Liquidity Rates coupled with the LMM 

Liquidity Provision Rates will continue 

to create a comprehensive incentive 

structure that encourages participation 

and, further, competition among LMMs. 

The proposal is intended to enhance the 

existing incentive structure, and 

encourage participation among LMMs. 

The Exchange believes that increased 

participation among LMMs will result 

in better market quality across all of its 

listings, resulting in greater market 

quality to the benefit of investors and 

other market participants. 

The Exchange believes that the 

proposal represents an equitable 

allocation of payments and is not 

unfairly discriminatory because, while 

the LMM pricing is currently and will 

continue to apply only to LMMs, such 

LMMs must meet rigorous Minimum 

Performance Standards 10 in order to 

receive the rebates provided under 

footnote 14. Where an LMM does not 

meet the Minimum Performance 

Standards for the applicable LMM 

Security, they will not be eligible for 

those rebates. Further, registration as an 

LMM is available equally to all 

Members and allocation of listed 

securities between LMMs is governed by 

Exchange Rule 11.8(e)(2). If an LMM 

does not meet the Minimum 

Performance Standards for three out of 

the past four months, the LMM is 

subject to forfeiture of LMM status for 

that LMM Security, at the Exchange’s 

discretion. As discussed above, the 

proposed changed merely eliminates the 

requirement that an LMM opt-in to the 

LMM Add Liquidity Rebate and instead 

will automatically provide an LMM 

with the greater of the LMM Liquidity 

Provision Rates or the LMM Add 

Liquidity Rebate. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe the proposed 

change burdens competition, but rather, 

enhances competition as it is intended 

to increase the competitiveness of BZX 

both among Members by incentivizing 

Members to become LMMs in BZXlisted securities and as a listing venue 

by enhancing market quality in BZXlisted securities. The marketplace for 

listings is extremely competitive and 

there are several other national 

securities exchanges that offer listings. 

Transfers between listing venues occur 

frequently for numerous reasons, 

including market quality. This proposal 

is intended to help the Exchange 

compete as a listing venue. Accordingly, 

the Exchange does not believe that the 

proposed change will impair the ability 

of issuers, LMMs, or competing listing 

venues to maintain their competitive 

standing. The Exchange does not believe 

the proposed amendment would burden 

intra-market competition as it would be 

available to all Members uniformly. 

Registration as an LMM is available 


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38366 Federal Register / Vol. 86, No. 136 / Tuesday, July 20, 2021 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f). 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3References herein to BX Rules in the 4000 Series 

shall mean Rules in BX Equity 4. 4An ‘‘Order Attribute’’ is a set of variable 

instructions that may be associated with an Order 

to further define how it will behave with respect to 

pricing, execution, and/or posting to the Exchange 

Book when submitted to the System. See Equity 1, 

Section 1(a)(11). 

5The RASH (Routing and Special Handling) 

Order entry protocol is a proprietary protocol that 

allows members to enter Orders, cancel existing 

Orders and receive executions. RASH allows 

participants to use advanced functionality, 

including discretion, random reserve, pegging and 

routing. See http://nasdaqtrader.com/content/ 

technicalsupport/specifications/TradingProducts/ 

rash_sb.pdf. 

equally to all Members and allocation of 

listed securities between LMMs is 

governed by Exchange Rule 11.8(e)(2). 

Further, if an LMM does not meet the 

Minimum Performance Standards for 

three out of the past four months, the 

LMM is subject to forfeiture of LMM 

status for that LMM Security, at the 

Exchange’s discretion. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 11 and paragraph (f) of Rule 

19b–4 12 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2021–050 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2021–050. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2021–050 and 

should be submitted on or before 

August 10, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15343 Filed 7–19–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92409; File No. SR–BX– 

2021–030] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Equity 4, Rule 

4703 

July 14, 2021. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 7, 

2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Equity 4, Rule 4703,3 in light of planned 

changes to the System, as described 

further below. The text of the proposed 

rule change is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/bx/ 

rules, at the principal office of the 

Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Presently, the Exchange is making 

functional enhancements and 

improvements to specific Order 

Attributes 4 that are currently only 

available via the RASH Order entry 

protocol.5 Specifically, the Exchange 

will be upgrading the logic and 

implementation of these Order Types 

and Order Attributes so that the features 

are more streamlined across the 

Exchange Systems and order entry 


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